Liberty Financial Pty Ltd (Liberty) has priced the Liberty Series 2022-1 SME transaction, its seventy-third term securitisation. The Liberty Series 2022-1 SME Trust is Liberty’s eleventh issue of securities backed by a portfolio of its innovative small-to-medium enterprises (SME) loans bringing Liberty’s total SME securitisations to over A$4.9 billion.
Given this strong investor demand across all offered tranches, the transaction was upsized from a launch volume of A$450 million to A$750 million. Westpac Banking Corporation (WBC) is the sole Arranger. WBC is also a Joint Lead Manager along with Credit Suisse. The transaction comprises A$750 million of notes rated by Moody’s Investors Service (Moody’s). The transaction attracted strong interest from investors across all offered tranches and is Liberty’s largest ever SME issuance.
The A$127 million Class A1a notes to be rated Aaa(sf) with a weighted average life of about 0.4 years, priced at a margin of 115 basis points over one-month BBSW.
The A$360 million Class A1b notes to be rated Aaa(sf) with a weighted average life of about 3.0 years, priced at a margin of 175 basis points over one-month BBSW.
The A$146.3 million Class A2 notes to be rated Aaa(sf) with a weighted average life of about 3.6 years, priced at a margin of 260 basis points over one-month BBSW.
The pricing of the Class B, C, D, E and F notes to be rated Aa2(sf), A2(sf), Baa2(sf), Ba2(sf) and B2(sf) is not disclosed.
Will Farrant, Managing Director at Credit Suisse, said: "We are extremely pleased with the level of institutional investor participation across the capital structure which is a strong endorsement of Liberty, and the collateral offered. Investors continue to have strong interest in assets classes outside of traditional residential mortgages as evidenced by the success of this transaction.”
The issue consists of a pool of SME mortgages with a weighted average loan-to-value ratio of 62% and is seasoned at 20.4 months. The Liberty Series 2022-1 SME transaction will settle on 7 November 2022.
Peter Riedel, Chief Financial Officer at Liberty, said: “Liberty is a leader in providing households and small businesses with the freedom to choose from a wide range of products and services to meet their financial needs. We are grateful for the support investors have extended to our business.”
Liberty has a rating of “STRONG” from Standard & Poor’s for the servicing of prime and non-prime mortgages as well as for servicing auto loans and commercial mortgages. Liberty is also Australia’s only investment-grade rated non-bank issuer (BBB-, outlook positive by S&P) and one of only a few lenders with an unblemished capital markets record with no ratings downgrades or charge-offs ever experienced by its securitisation program.
© Liberty Financial Group Limited (ACN 125 611 574) and Liberty Fiduciary Ltd (ACN 119 884 623).